If Gov. Hogan Wants to Help Small Businesses, He Should Sign Paid Sick Days Bill

Opponents of HB1, the earned paid sick leave bill passed overwhelmingly this year by both chambers of the Maryland General Assembly, testified that job loss and business failures would result. Business persons who actually care about both their employees and their bottom lines know different, as one of them testifies here. This blog post is reposted from Working Matters Maryland, where it appeared May 3.

/By Erik Rettig, Small Business Majority via Working Matters Maryland/ The Maryland General Assembly made history this year when it passed the Healthy Working Families Act (HB 1), which would benefit the state’s small businesses and their employees by allowing workers at firms with 15 or more employees to earn paid sick days, while employees at firms with fewer than 15 employees would be able to accrue unpaid sick leave.

Unfortunately, Gov. Larry Hogan (R) claimed that the bill would be “dead on arrival” if it reached his desk, even though the legislation would level the playing field for small firms that want to provide these type of benefits. Although Hogan has since moderated his stance, it seems that he still intends to veto HB 1. If he truly cares about helping small businesses, however, he should reconsider.

Paid sick days laws are supported by many small businesses. In fact, Small Business Majority’s scientific opinion polling found half of small business owners nationwide support measures like HB 1.

Many small business owners support guaranteed paid sick days because that employee benefit contributes to a healthy business climate. Studies show that earned paid sick days are good for business owners’ bottom lines by providing long-term cost savings. As the National Partnership for Women and Families noted, workers who “have paid sick days need less time to recover from illnesses and spend fewer days in bed overall than workers without paid sick days.” Another study showed that “presenteeism,” or employees under-performing due to illness, costs employers $160 billion per year – twice as much as the cost of absenteeism due to illness. Ultimately, the cost of an employee coming into work sick outweighs the cost of them staying home a day or two to recover.

What’s more, paid sick days can lead to better productivity and lower employee turnover rates. In Maryland, the Institute for Women and Policy Research has estimated that providing earned paid sick time is expected to yield $132 million annually for employers due to reduced turnover. Those benefits were borne out in Jersey City, N.J., where more than 40 percent of employers who changed their policies to comply with the city’s earned paid sick days law found that it “increased productivity, reduced turnover and/or led to better hires.” And while some have claimed policies like these can be job killers, in states that have passed earned paid sick days standards, like Connecticut, California and Massachusetts, unemployment actually went down in the year after those laws were implemented.

Maryland businesses like Emory Knoll Farms are an example of the positive benefits that come with offering paid sick days. The Street-based business provides employees with generous benefits, including paid sick leave. Offering paid sick days increases employee retention, which in turn benefits the farm’s bottom line; after all, hiring and training new employees constantly is a costly endeavor. What’s more, when employees show up sick for work their output declines and they may even get other employees sick. This certainly decreases productivity.

The bottom line is that making paid sick days a universal practice will ensure that small businesses like Emory Knoll Farms can’t be undercut on costs for doing right by their employees and will be in a better position to compete with larger businesses.

Hogan has referred to small business as “the backbone of our economy.” If he truly feels that way, he should sign HB 1, a law that would reinforce this economic backbone by evening the playing field for small businesses.

Let’s hope Hogan does the right thing for Maryland’s entrepreneurs. Let’s hope he signs HB 1.

This post was co-authored by Ed Snodgrass, co-owner of Emory Knoll Farms in Street, Md.